U.S. home loan applications climbed last week, as lower mortgage rates spurred demand for refinancings and overshadowed a small drop in applications to buy houses, an industry group said on Wednesday.
The Mortgage Bankers Association's seasonally adjusted mortgage application index rose 2.5 percent to 743.4 in the week ended April 11.
It was the second weekly increase in the volatile gauge of mortgage applications, pushing the measure well above a reading of 630.6 a year earlier.
Average 30-year home loan rates dropped 0.04 percentage point in the latest week to 5.74 percent, nearly half a percentage point lower than a year ago, according to the MBA.
With long-term mortgage rates easing, the MBA's seasonally adjusted refinancing applications index gained 5.2 percent to 2,866.0, easily offsetting the 0.8 percent decline in home purchase applications to 381.6 last week.
While total mortgage purchase requests edged lower last week, a sub-index of purchase applications for loans backed by government programs such as the Federal Housing Administration rose 3.5 percent to 192.4, up sharply from 84.0 a year ago.
The government has broadened the reach of the FHA program and some lawmakers are pushing for an even greater expansion to help homeowners facing foreclosure.